Principles

·  NEGOTIABLE INSTRUMENTS — Parol evidence -— No: admissible to vary terms of document.

·  EVIDENCE — Negotiable Instruments Parol evidence — Not asmissible  to vary terms of document.

·  AGENC Y — Negotiable Instruments — Principal cannot be held liable unless his name appears on the instrument.

·  IINSTRUMENTS — Agency — Principal cannot be held liable unless his name appears on the instrument.

Defendant. Imam El Siddig El Mahdi, signed promissory notes to plaintiff with his. name alone. He claimed in defence to an action on the notes that he signed as agent of the Umma party

Held: (i) Oral evidence cannot be admitted to alter the terms of a negotiable instrument by showing the capacity of the signator as an agent.

(ii) An agent is liable on a note signed by him without qualification describing his position as agent; the principal cannot be held liable unless his name appears on tbe instrument.

(ii) An agent is liable on a note signed by him without qualification describing his position as agent; the principal cannot be held liable unless his name appears on tbe instrument.

Judgment

Advocates: Abdel Aziz Safwat…………………...… for plaintiff

Mohamed Ahmed Mahgoub …………………..... for defendants

M.Y. Mudawi, PJ., July 9, 1964:— On December 26, 1962 plaintiff, .attan Trading Co., Ltd. instituted these proceeding; against the heirs ,f the late Imam El Siddig El Mahdi for the recovery of £S.906.4l0m/ms., being value of six promissory notes signed by the late Imam in 1958 together with interest from the date of execution to the date of institution of this suit. Defendants admitted that the late Imam executed the notes and that up to this moment neither the Imam nor his heirs settled the value thereof. Further they contended that the late Imam signed the notes for and on behalf of the Umma party, now dissolved, and therefore neither he nor his successors are liable. They also alleged that the notes were signed in return for some motor cars that were received by the Umma party.

The law on the question of the liability of the signatory of a promissory note is very clear. Any person who puts his name without any qualification on a note of this nature cannot be heard to say that he is not liable and that some other person or body of persons is liable. He cannot say that he is an agent or a representative of some other principal. Agents and representatives in order to avoid liability should clearly put on the note the capacity in which they purport to sign.

In Powell, Agency 25O (2nd ed. 1961) it is stated:

“Since . no person is liable on the bill unless he signs it, the agent is not liable at all if he does not sign it. The only positive effect of Bills of Exchange Act 1882, s. 26(1) is that if he (the agent) adds represen tative words to his signature, his own personal liability is excluded, whatever else may appear in the instrument. But on the ordinary general principles stated above he will be liable if he signs without qualification or if he adds descriptive words to his signature, unless there is something else in the instrument which indicates that he is signing it in a representative capacity.”

The late Imam signed the notes without adding anything to his name to indicate that he is signing in a capacity other than his personal capacity. Only the bare name appears on th notes. Inview of.the exposition of the law above I think it is now plain that defendants are liable. The attempt by defendants to adduce verbal evidence to prove the capacity in which the notes were executed is to me a bit futile. It is an attempt to alter, add or vary a written agreement by parol evidence. The law does not allow it. Again, defendants attempted to say that the vehicles, the consideration of these notes, belong to the Umma party and that part of the price of the cars was paid to plaintiff by the party. These facts do not, in my judgment, affect the situation either way. The fact that the cars in question are owned by the Umma party is hot necessarily inconsistent with the fact that Sayed El Siddig is responsible for the price.

In the result this Court orders the defendants to pay to plaintiff the following amounts:

£S. 906.410 m/ms. in principal

34.250m/ms. in Court fees

20.000m/ms in advocate costs

£S.960.660 m/ms in all

The amount carries interest at the rate of 9% per annum from  date of institution of the suit up to date of settlement.

Editors’ Note: See A.L.I Restatement, Agency 2d, s. 152, Comment (a); Uniform Commercial ‘Code, s. 401. Mechem, Agency, s. 311(4th ed. ed. P. Mechem 1952) after discussing the general rule as stated above, states: “The inequity of such a result is apparent, where the principal has received the benefit of the consideration, and it is not surprising that in many cases the principal has been held liable, not on the instrument but in quasi contract or ‘on the original consideration.” Cf Tawfic Yousif Totongi v. Ali El Siddig. AC-APP-1-1963, (1964) S.L.J.R..

An appeal was taken by advocate Mahgoub on behalf of the Heirs of Imam El Siddig El Mahdi, AC The appeal was struck off by the Chief Justice on October 1, 1964 because the “Memo of appeal (was) not submitted.”